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The downside of all of this for funds is that sometimes a fund touted as hot one to be in attracts so much investment attention (i.e., money) that it grows beyond its original intention. At that point, it loses its direction and very thing that made it strong is sacrificed. And guess what happens to performance?
So, in midst of all hawking and hype for this fund or that, what's an investor to do to make intelligent choices?
For myself and my clients I use a trend tracking methodology, which identifies long-term trends in various markets. I research funds for stability and reliability as well as current performance. Then, when our trend indicator signals a Buy, we select our mutual funds based on momentum figures for various time periods to arrive at most promising fund(s) to use for this cycle.
This gives us a head start and sometimes, weeks after we've bought a fund, I see it written up in financial papers as being one of best performers.
Does this approach always put us in number one fund? Maybe not. But we are almost always in funds that are doing very, very well. And do we get in at bottom and out at very top? Again, maybe not.
However, I can tell you that, using this methodology, my clients and I followed sell signal we got in October, 2000, and were safely invested in solid money markets when stock market crashed and burned.
Is this approach for you? It depends on how much adrenaline rush you like when you watch your investments. Personally, I fulfill my thrill quotient with other things in life and enjoy sleeping at night when it comes to my investments.
Ulli Niemann is an investment advisor and has been writing about objective, methodical approaches to investing for over 10 years. He eluded the bear market of 2000 and has helped hundreds of people make better investment decisions. To find out more about his approach and his FREE Newsletter, please visit: http://www.successful-investment.com